Megawatt demands US$4m for charges

Source: Megawatt demands US$4m for charges – The Zimbabwe Independent May 11, 2018

MEGAWATT Energy, a South African-based company which conducted an investigation into a multi-million dollar deal between state-owned entity NetOne and Chinese firm Huawei Technologies, is demanding a US$4 million payment for the work it carried out in 2015.

By Hazel Ndebele

The review of the US$218 million deal resulted in US$30m savings for NetOne, as first reported by the Zimbabwe Independent.

This comes after government in 2012 partnered Huawei in rolling out NetOne’s National Mobile Broadband (NMBB) project as competition in the telecoms sector intensified on the back of massive growth in data and overlay services. However, bilateral relations between Harare and Beijing came under the spotlight after Megawatt Energy revealed that the publicly-underwritten US$218m equipment deal was overpriced. The move would have seen government losing millions in taxpayers dollars.

Amid an outcry the NMBB project had not been opened to competitive public tender process and was overpriced, the Ministry of Information Communication Technology (ICT) engaged the South African-based IT and energy consultancy firm, Megawatt Energy, to re-evaluate the deal and renegotiate the pricing structure in line with international best standards.

Information gathered by this paper this week, however, shows that Megawatt Energy has not been paid for its work.

In a letter of demand written by Bere Brothers Legal Practitioners to the Ministry of ICT, NetOne and Huawei on behalf of Megawatt, dated April 30 2018, the company is demanding that it be paid US$4m for the work it did and as per agreement.

“We are advised by our client that it was appointed by your Ministry to conduct an investigation and if possible negotiate a rebate or refund for overcharged contracts between NetOne cellular and Huawei Technologies. Our client proceeded to conduct the investigation as assigned and indeed proved that NetOne Cellular had been overcharged,” reads the letter seen by businessdigest. “As a result of the work done by our client, NetOne Cellular realised a saving of US$30m on the NMBB phase two project which they had contracted Huawei Technologies.”

The letter says that in terms of the agreement between the Ministry of ICT, NetOne and Huawei, Megawatt Energy was entitled to payment which consists US$1 million as service fees and a further 10% commission of the total amount recovered or saved.

This entitled Megawatt to a total of US$4m in charges.

According to Megawatt and minutes of a meeting held between the three parties, Megawatt was to be paid its dues and the matter was to be resolved amicably given the rather scandalous findings of the investigation and the cordial diplomatic relations of Zimbabwe and the Chinese.

“Our client still desires to have this matter resolved amicably without resort to the courts in order to avoid exposing the details of the contract to the public domain,” the letter says. “Our client has on several occasions engaged NetOne in a bid to secure payment. An agreement was signed between NetOne and Megawatt in April 2017 wherein our client accepted a varied payment which was due on or before July 31 2017 failing which the full amount of US$4m would be due again. NetOne Cellular and Huawei failed to pay as promised hence the full demand for full value.”

Last year, Megawatt had agreed to a payment of US$2,2m and would not further claim the original full amount of US$4 million had NetOne managed to pay that amount by July 31 2017.

Megawatt Energy is now demanding that the matter be resolved within 14 working days. While giving oral evidence before the Parliamentary Portfolio Committee on ICT in 2016, former NetOne chief executive Reward Kangai accused ICT minister Supa Mandiwanzira of suspending him for refusing to pay Megawatt the US$4m fee.

Mandiwandzira was accused of receiving the unpaid US$4m amount as a bribe, a claim he dismissed as false and malicious.